U.S. operator Chaparral Energy has agreed to sell assets in Oklahoma and Texas Panhandle for $170 million to an unnamed buyer as the firm looks to become pure Stack-focused player.
The deal sees Chaparral offload its North Burbank and Texas Panhandle enhanced oil recovery (EOR) assets. The deal is expected to close in November 2017.
“The sale of these assets marks a major milestone in the transition of Chaparral to a premiere pure-play Stack operator. Our teams will now be able to further focus our capital, activity and operational knowledge exclusively on accelerating development of our highly economic Stack inventory,” said Chief Executive Officer Earl Reynolds.
In addition to the cash, the agreement provides for contingent payments to Chaparral through December 2020 on a portion of the buyer’s unhedged production volumes.
Reynolds added: "“In addition, the proceeds from this transaction will allow us to further reduce our debt, increase liquidity and strengthen our already strong balance sheet. The sale will also materially lower our overall total operating cost structure, which we view as critical in this volatile commodity price environment.”
Chaparral’s previously stated 2017 production guidance, including its EOR assets, was 8.3 to 8.7 million barrels of oil equivalent, which includes an anticipated 45 per cent year-over-year increase in STACK production ranging from 9,100 to 9,500 barrels of oil equivalent per day(Boe/d).